Correlation Between Alnylam Pharmaceuticals and Replimune

Can any of the company-specific risk be diversified away by investing in both Alnylam Pharmaceuticals and Replimune at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alnylam Pharmaceuticals and Replimune into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alnylam Pharmaceuticals and Replimune Group, you can compare the effects of market volatilities on Alnylam Pharmaceuticals and Replimune and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alnylam Pharmaceuticals with a short position of Replimune. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alnylam Pharmaceuticals and Replimune.

Diversification Opportunities for Alnylam Pharmaceuticals and Replimune

0.28

Correlation Coefficient

Alnylam Pharmaceuticals  Replimune

Modest diversification

The 3 months correlation between Alnylam and Replimune is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Alnylam Pharmaceuticals and Replimune Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Replimune Group and Alnylam Pharmaceuticals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alnylam Pharmaceuticals are associated (or correlated) with Replimune. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Replimune Group has no effect on the direction of Alnylam Pharmaceuticals i.e., Alnylam Pharmaceuticals and Replimune go up and down completely randomly.

Pair Corralation between Alnylam Pharmaceuticals and Replimune

Given the investment horizon of 90 days Alnylam Pharmaceuticals is expected to generate 0.77 times more return on investment than Replimune. However, Alnylam Pharmaceuticals is 1.31 times less risky than Replimune. It trades about 0.08 of its potential returns per unit of risk. Replimune Group is currently generating about -0.05 per unit of risk. If you would invest  23,601  in Alnylam Pharmaceuticals on December 30, 2024 and sell it today you would earn a total of  3,245  from holding Alnylam Pharmaceuticals or generate 13.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alnylam Pharmaceuticals  vs.  Replimune Group

Alnylam Pharmaceuticals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alnylam Pharmaceuticals are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Alnylam Pharmaceuticals showed solid returns over the last few months and may actually be approaching a breakup point.

Replimune Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Replimune Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Alnylam Pharmaceuticals and Replimune

The main advantage of trading using opposite Alnylam Pharmaceuticals and Replimune positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alnylam Pharmaceuticals position performs unexpectedly, Replimune can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Replimune will offset losses from the drop in Replimune's long position.

The idea behind Alnylam Pharmaceuticals and Replimune Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.